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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 11, 1997
ZAPATA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-4219 C-74-1339132
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1717 ST. JAMES PLACE
SUITE 550
HOUSTON, TEXAS 77056
(Address of principal executive offices)
(713) 940-6100
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
On July 11, 1997, Zapata Corporation ("Zapata" or the "Company"),
completed the sale of its Bolivian oil and gas interests ("Bolivian
Interest") to Tesoro Bolivia Petroleum Company ("Tesoro") for $18.8
million cash and the assumption by Tesoro of certain liabilities
(collectively, the "Bolivian Sale"). The terms of the Bolivian Sale
were determined by negotiations between Zapata and Tesoro, Zapata's
co-venturer with respect to the Bolivian operations. In connection with
the Bolivian Sale, Zapata established a $4.0 million letter of credit
in favor of Tesoro as security against the possibility of a Bolivian
income tax liability incurred by Zapata as a result of the Bolivian
Sale. Zapata's obligations with respect to the letter of credit will
terminate on the first business day following the first to occur of the
recording of the assignment of Zapata's interest by Tesoro as a public
deed in Bolivia or the receipt by Tesoro of evidence of payment by
Zapata of all taxes due in Bolivia. The Bolivian Sale resulted in an
after-tax gain of approximately $5.0 million that will be recorded in
Zapata's fiscal 1997 fourth quarter which ends September 30, 1997.
The Bolivian Sale completes Zapata's exit from the energy business.
As a result, Zapata has restated its financial statements to reflect
its oil and gas operations as discontinued operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) PRO FORMA FINANCIAL INFORMATION
Filed herewith is unaudited pro forma condensed consolidated
financial information for Zapata Corporation and subsidiary
companies reflecting the financial position of the Company as of
March 31, 1997 and the results of its operations for the six months
ended March 31, 1997 and the fiscal year ended September 30, 1996,
giving effect to the Bolivian Sale.
(c) EXHIBITS.
Exhibit 10(y) - Purchase and Sale Agreement for Contract Rights
and Assets Blocks XVIII and XX, Department of
Tarija, Bolivia dated as of July 11, 1997 by
and between Tesoro Bolivia Petroleum Company
and Zapata Exploration Company and
Zapata Corporation.
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ITEM 7. FINANCIAL STATEMENTS
(b) Unaudited Pro Forma Financial Information
The following unaudited pro forma condensed consolidated balance
sheet and unaudited pro forma condensed consolidated income
statements (collectively, the "Pro Forma Financial Statements")
give effect to the Bolivian Sale. The pro forma condensed
consolidated balance sheet of Zapata at March 31, 1997 sets forth
the historical financial position of Zapata as if the Bolivian Sale
had been consummated on March 31, 1997. The pro forma condensed
consolidated income statements of Zapata for the six months ended
March 31, 1997 and for the twelve months ended September 30, 1996
reflect the historical results of Zapata as if the Bolivian Sale
had been consummated on October 1, 1995. The Pro Forma Financial
Statements should be read in conjunction with the historical
consolidated financial statements and related notes and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in Zapata's Report on Form 10-K
for the year ended September 30, 1996.
The Pro Forma Financial Statements set forth below may not be
indicative of what the actual results of operations would have
been had the Bolivian Sale occurred on the date indicated or that
may be obtained in the future.
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ZAPATA CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(in thousands)
Historical
Zapata Pro Forma Pro Forma
Corporation Adjustments Total
----------- ----------- ----------
Current assets:
Cash and cash equivalents $ 86,849 $14,800 $101,649
Restricted cash 337 4,000 4,337
Other current assets 37,852 (816) 37,036
-------- ------- --------
Total current assets 125,038 17,984 143,022
Investments and other assets 43,585 (4,164) 39,421
Property and equipment, net 45,783 (6,673) 39,110
-------- ------- --------
Total assets $214,406 $ 7,147 $221,553
======== ======= ========
Current liabilities $ 20,700 ($588) $ 20,112
-------- ------- --------
Long-term debt 19,782 --- 19,782
-------- ------- --------
Other liabilities 16,976 --- 16,976
-------- ------- --------
Stockholders' equity:
Preference stock 3 --- 3
Common stock 7,388 --- 7,388
Capital in excess of par value 131,961 --- 131,961
Reinvested earnings 17,596 7,735 25,331
-------- ------- --------
156,948 7,735 164,683
-------- ------- --------
Total liabilities and stockholders' equity $214,406 $ 7,147 $221,553
======== ======= ========
(The accompanying notes are an integral part of
the Pro Forma Financial Statements.)
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NOTE TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The following note sets forth the assumptions used in preparing the
unaudited pro forma condensed consolidated balance sheet as of March 31, 1997.
(1) To record the Bolivian Sale. In connection therewith, Zapata
established a $4.0 million letter of credit in favor of Tesoro as
security against the possibility of a Bolivian income tax liability incurred by
Zapata as a result of the Bolivian Sale. If such income taxes are incurred in
Bolivia, the Company expects to utilize a foreign tax credit generated by the
payment of such taxes against its U.S. federal income tax liability. At
March 31, 1997, the Bolivian Sale would have resulted in an after-tax gain
of $7.7 million. This gain includes a $3.0 million receipt from the
Bolivian government for certain unrecorded past-due receivables.
Zapata recorded this receipt as revenue from discontinued operations in
May 1997 when the cash was received. As a result, the actual gain generated by
the Bolivian Sale will be reduced to approximately $5.0 million.
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ZAPATA CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
SIX MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL
ZAPATA PRO FORMA PRO FORMA
CORPORATION ADJUSTMENTS TOTAL
----------- ----------- ---------
Revenues $49,724 ($1,137) $48,587
------- ------- -------
Expenses:
Operating 37,691 (454) 37,237
Depreciation, depletion and amortization 1,978 (123) 1,855
Selling, general and administrative 3,865 --- 3,865
------- ------- -------
43,534 (577) 42,957
------- ------- -------
Operating income 6,190 (560) 5,630
------- ------- -------
Other income (expense):
Interest income, net 873 (6) 867
Equity in loss of unconsolidated affiliates (838) --- (838)
Other 1,114 --- 1,114
------- ------- -------
1,149 (6) 1,143
------- ------- -------
Income from continuing operations
before taxes 7,339 (566) 6,773
------- ------- -------
Provision for income taxes 2,703 (198) 2,505
------- ------- -------
Income from continuing operations $ 4,636 ($368) $ 4,268
======= ======= =======
Per share data:
Income from continuing operations $ 0.16 ($0.02) $ 0.14
======= ======= =======
Average common and common equivalent
shares outstanding 29,571 --- 29,571
======= ======= =======
(The accompanying notes are an integral part of
the Pro Forma Financial Statements.)
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NOTE TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
The following note sets forth the assumptions used in preparing the
unaudited pro forma condensed consolidated income statement for the six months
ended March 31, 1997.
(1) To record the Bolivian Sale. As a result, Zapata's income
statement has been restated to reflect the results from its oil and gas
operations as a discontinued operation.
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ZAPATA CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL
ZAPATA PRO FORMA PRO FORMA
CORPORATION ADJUSTMENTS TOTAL
---------------- ---------------- ------------------
Revenues $95,678 ($2,069) $93,609
------- -------- -------
Expenses:
Operating 76,328 (1,080) 75,248
Provision for asset write-downs 5,477 (5,477) ---
Depreciation, depletion and amortization 3,492 (240) 3,252
Selling, general and administrative 9,229 (71) 9,158
------- -------- -------
94,526 (6,868) 87,658
------- -------- -------
Operating income 1,152 4,799 5,951
------- -------- -------
Other income (expense):
Interest income, net 678 --- 678
Equity in loss of unconsolidated affiliates (4,471) --- (4,471)
Other (892) --- (892)
------- -------- -------
(4,685) --- (4,685)
------- -------- -------
Income (loss) from continuing operations
before taxes (3,533) 4,799 1,266
------- -------- -------
Provision (benefit) for income taxes (1,012) 1,680 668
------- -------- -------
Income (loss) from continuing operations ($2,521) $3,119 $598
======= ======== =======
Per share data:
Income (loss) from continuing operations ($0.08) $0.10 $0.02
======= ======== =======
Average common and common equivalent
shares outstanding 29,565 --- 29,565
======= ======== =======
(The accompanying notes are an integral part of
the Pro Forma Financial Statements.)
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NOTE TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
The following note sets forth the assumptions used in preparing the
unaudited pro forma condensed consolidated income statement for the twelve
months ended September 30, 1996.
(1) To record the Bolivian Sale. As a result, Zapata's income
statement has been restated to reflect the results from its oil and gas
operations as a discontinued operation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZAPATA CORPORATION
By: /s/ Robert A. Gardiner
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Robert A. Gardiner
Senior Vice President and
Chief Financial Officer
Date: July 28, 1997
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EXHIBIT INDEX
Exhibit Description
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Exhibit 10(y) Purchase and Sale Agreement for Contract Rights and
Assets Blocks XVIII and XX, Department of Tarija,
Bolivia dated as of July 11, 1997 by and between
Tesoro Bolivia Petroleum Company and Zapata Exploration
Company and Zapata Corporation.